econ103 quiz-Opportunity costs is

1. Opportunity costs is
a. The money a business loses
in a bad investment
b. The value of the best
foregone opportunity
c. The price an individual
pays for making a mistake
d. Opportunity knocks but
once; if you miss your chance will never come again
2. Which of the following is an
example of diminishing marginal utility.
a. You give up donuts on your
b. You like one donut with
your coffee, but not two.
c. You buy more donuts when
the price of coffee rises
d. You cut back on donut after
your pay cut.
3. Suppose there is a drought
in California damaging orange groves
a. price will increase
quantity will increase
b. price will decrease
quantity will decrease
c. price will decrease
quantity will increase
d. price will increase
quantity will decrease
4. Which is an example of the substitution
effect in demand?
a. The price of coffee rises,
so you buy less coffee
b. The price of coffee rises,
so you buy more coffee
c. The price of coffee rises,
so you buy more tea and less coffee
d. The price of coffee rises,
so you buy less tea and more coffee
5. All of these influences
supply except
a. Prices of inputs
b. Expected future prices
c. Extent of competition in
the market
d. Use of fiat money
6. Markets are inefficient
a. Buyers and sellers have
perfect information
b. Buyers and sellers are free
to enter and exit
c. A small number of sellers
coordinate products and prices
d. Buyers and sellers act
independently to pursue their own self- interests
7. Of the following examples
which is not an example of a principle-agent incentive problem
a. Banks bundle mortgage loans
and offer collateralized debt obligations to pension funds
b. A company’s chief executive
officer takes action to merge with another firm so stock prices can rise in the
short run
c. A cashier purposely forgets
to ring up a sale and does not give the customer a receipt
d. A baseball player who does
not pay his sports agent
8. Price discrimination is a
situation where a producer
a. Charges different prices in
a different market
b. Charges the same price in
different market
c. Colludes with other
companies on setting prices I all markets
d. All of the above

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